Barclays It alerted investors about “negative summer (boreal)” seasonality “a period in which the International Bank Wait a period of greater volatility in financial marketsproduct of an increase in uncertainty in monetary policy in the United States, a situation exacerbated by The constant criticism of the American president, Donald Trump, to the Federal Reserve (Fed) and the lack of commercial agreements.
In a report entitled “Summer Anxiety”Barclays analysts pointed out that During August and September historically turbulence occur in international markets. The firm stressed that “political uncertainty keeps markets to the edge”, so it considered that “covering itself seems prudent.” He argued that the most important actions are close to their historical maximums and the macroeconomic panorama continues to be “noisy.”
The possible tariff impact
A point of special concern is the lack of news in the tariff negotiations that the US is carrying out. Although an agreement with Indonesia was reported, Barclays warned that “uncertainty persists for the European Union before the deadline of August 1”.
Although the market reaction was moderate so far, This “possibly reflects a degree of complacency of investors”since the possibility of implementing a 30% tariff on European goods remains a latent threat.
“A complete implementation of 30% tariffs to the EU would certainly lead to a deeper economic slowdown and It would seriously harm the taco operation (‘Trump is always cowed’, for its acronym in English) predominantly“Barclays experts warned, referring to the strategy of some investors who assume that the president’s threats will not materialize.
Additional pressures
Beyond commercial tensions, markets face additional pressures. The yields of the American treasure bonds increased due to the increase in the strongest retail inflation than expected.
Besides, Barclays cited “concerns about the increasing fiscal deficit and the position of the president of the Federal Reserve, Jerome Powell, contributing to the concern of investors”. Although President Trump subsequently denied having intentions to fire Powell, the initial headlines generated nervousness in the markets.
Mixed perspectives for the rest of the year
Thus, the firm maintains some optimism. “Growth and profit foundations continue to support the sharing market,” he said, highlighting that US economic surprises have become positive and The gains of the second quarter have shown “corporate resilience”.
As for regional perspectives, Barclays expressed confidence in European potential: “We continue to see a way for European actions to take off and reach new maximums by the end of the year,” although they warned that “it may not be a soft path to get there.”
Source: Ambito
